Don’t do it Jim! Stupid road user charge will be a disaster for the EV market in Australia | Opinion

All forms of Government operate with a combination of carrots and sticks (in President Trump’s case his approach is to look like a carrot and wield a big stick) which can be utilised to move consumer sentiment. Let’s see if we can work out which one the Federal Government’s proposed national road user tax on electric vehicles would be.

Reports this week insist Treasurer Jim Chalmers told a Business Council of Australia dinner in Canberra last week an EV road user charge is not only on the agenda, it’s a top priority.

When it comes to EVs, subsidies and tax breaks are carrots and places like Norway – and more recently much of Europe – have thrown these carrots around as if their country is run by President Bugs Bunny.

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Or they did. Many of the incentives that Norway used to get to the situation where more than 90 per cent of new cars sold are electric were gradually removed, once they’d achieved momentum. So carrots are things that encourage people to buy EVs and Australia does have a few of these, a list of which you can find here including registration discounts, zero interest loans, stamp duty discounts and even cash rebates of up to $3500 in WA.

It’s fair to say that carrots like this have had some success, but it’s also fair to say that the take up of electric vehicles in Australia could be a lot faster, and that there does seem to have been a bit of a drop off of late as people run towards hybrid alternatives.

With EVs making up less than 10 per cent of the market, a sensible person might question whether this is a good time to hit people thinking about buying one with a stick, which would clearly be a tax that charges people with electric cars for every kilometre they drive.

Sure, it’s going to annoy five kinds of hell out of people who’ve already bought one, but more importantly it’s going to act like a big slamming of the brakes on those deciding whether to buy one or not.

We’ve seen Australian governments try this before, of course, with the Victorian Government’s attempt to introduce such a tax in 2021 later struck down by the High Court, which ruled that it was the kind of levy only the Federal Government could impose. Which now seems likely.

In NSW, the State Government was discussing doing something similar, at least until the High Court made its ruling, but its tax was not going to come in until July 1. 2027, or when EVs made up 30 per cent of all new cars sold, whichever came first.

A spokesman for the Treasurer told the Australian Financial Review late last week: “We will work with the states and territories on policies in this area following the decision in the High Court, but we’ll do it in a considered and consultative way and take the time to get it right.”

It should come as no surprise that the Greens are opposed to the idea, nor that the Coalition is reportedly open to it.

It’s not often than I think governments make a lot of sense, but the Federal Government – the same one that wants us to get to net zero, one day – seems to be hitting itself in the face with a big stick here, while the NSW Government’s policy, which won’t happen now, seemed to actually make some sense.

Yes, you’re going to hear the argument rolled out that we have to pay for roads somehow, and that taxes on petrol are what pay for that, and all these people – well not that many, realistically – driving around in EVs and not paying that tax are getting a free ride (except for their registration fees of course).

But don’t buy it. Petrol taxes do not go directly to paying for roads, they are just as likely to go to saving frogs, or funding hospitals. All taxes go into general revenue, and everything gets paid out from there. The idea that every dollar of petrol tax – or speeding fine revenue for that matter – goes to roads is a furphy.

There will, eventually, be a time when a road-user charge of some kind makes sense, and weirdly, yes, our cousins in NZ already have one, but it’s hard to argue that that time is now. All this will do is discourage people from buying EVs, and slow down the rate at which the market grows.

This is a bad idea. It’s a stick in the mud, when what we need is more carrots.

Stephen Corby

Stephen is a former editor of both Wheels and Top Gear Australia magazines and has been writing about cars since Henry Ford was a boy. Initially an EV sceptic, he has performed a 180-degree handbrake turn and is now a keen advocate for electrification and may even buy a Porsche Taycan one day, if he wins the lottery. Twice.

14 thoughts on “Don’t do it Jim! Stupid road user charge will be a disaster for the EV market in Australia | Opinion

  • February 11, 2025 at 4:07 pm
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    Maybe the Federal Government is going to pay the families of children killed in African Lithium mines compensation for their losses from the tax. Now there’s a thing, lets tax EV’s a blood money tax on top of the retail price. What say you.

    • February 12, 2025 at 2:20 pm
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      My EV is a Volvo, I feel very comfortable with Volvo’s governance of it’s supply chain for all materials used in the manufacture of their vehicles.

    • February 12, 2025 at 5:29 pm
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      If you are going to run a ‘Will no-one think of the children’ line, consider the effect of continued fossil fuel burning on children both in local pollution and global climate change.
      BTW. The largest producer of lithium is Australia, which generally does not employ children in mines.

    • February 12, 2025 at 5:44 pm
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      Only an idiot thinks that the Lithium comes from African mines. I think you are being confused with Cobalt, you know, the stuff that is used to refine your petrol and diesel.

      Your ignorance has made you the accidental hypocrite.

    • February 19, 2025 at 11:37 am
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      So exactly how do you propose to pay for your road use?????

      Given the fact that EV’s generally weigh more than ICE counterparts, they will have a scaled up negative impact on the road surface.

      I have both, and WANT to pay for my share, unlike the entitled EV driver’s who went to court to make sure they get away scott free.

      Rego then becomes $2500.
      That should even the score.

  • February 11, 2025 at 4:29 pm
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    So, both major parties are quite happy to waste over $300 billion on a few nuclear-powered subs that most likely will never see military action but are so worried about some lost revenue from currently a relatively small number of non-polluting cars on the road. Are they insane? Also, do they not realize EV drivers already pay tax via GST on electricity used to charge their vehicles? A road user charge sounds reasonable, maybe when 30% sales are met, but the costs involved in administrating it could be high. More public servants needed?

  • February 11, 2025 at 5:11 pm
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    well Stephen the taxes for saving frogs and hospitals have come from some where so why shouldn’t ev drivers who use the road structure as do drivers of conventional vehicles contribute to the frogs and hospitals as well

    • February 11, 2025 at 9:54 pm
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      But they are contributing, through so many, many other taxes. Am I shouting into the wind here?

      • February 12, 2025 at 6:29 am
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        Why shouldn’t ev owners pay a road tax ..everyone else does… its part of motoring, whether it’s spent on roads or whatever…. comparing
        Australia with Norway is as silly as it gets.. evs would be good in the city, so much so i would have one if I lived there..I maintain that if something is any good governments dont have to force or encourage people to buy them it will naturally evolve…having said that they have no future in towing a header front 500 klms west of Gulargambone in there present form…

      • February 12, 2025 at 5:47 pm
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        I think you are Stephen, unfortunately.

        At the end of the day, everyone benefits from the roads. Unless everything you use comes out of your own backyard, you use the roads as much as most, even if you don’t drive a car. They are a public utility like any other.

        People just let envy get in the way of objectivity.

  • February 12, 2025 at 6:15 am
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    Looking at the bigger picture here, considering that:
    Each EV saves us circa 15k p.a. in medical expenses from a reduction in pollution.
    Each EV saves us from buying foreign oil with all the associated evils ( who wants to fund Saudi Arabia?)
    I think we should be doing more to support them. More carrots, no sticks!
    ( do your own research on the above points)

    • March 6, 2025 at 6:38 am
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      If this industry is so good and wonderful EVs can only be afforded by the well off why all the subsidies?

  • February 12, 2025 at 9:42 am
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    Having experienced it when in New Zealand, and the distances are similar to Norway.
    The distances here in Australia are thousands of kilometres longer so costs would be prohibitive of any introduction of road user charges here.
    But if they want to be dumped out of government go to it !!!

  • February 13, 2025 at 10:26 am
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    It could be that nore people are in agreement then not, also has it occurred to some of these commentators that EVERYBODY pays gst, consumes other goods, not only ev owners. As far as pollution goes last time I looked electricity was produced by burning coal, not a environmentally friendly product.

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